India’s Contract Research, Development, and Manufacturing Organization (CRDMO) industry is on a strong growth trajectory, with the sector expected to expand from ₹60,641 crore (US$ 7 billion) in 2023 to ₹1,21,282 crore (US$ 14 billion) by 2028, marking a 14% compound annual growth rate (CAGR), according to Macquarie Equity Research. This growth is being fueled by pharmaceutical outsourcing trends, global supply chain shifts, and regulatory support, positioning India as a key player in the global pharmaceutical supply chain.

India’s Competitive Edge in Global Pharma Outsourcing

The contract research and manufacturing industry is becoming increasingly important as global pharmaceutical companies seek cost-effective, reliable partners to optimize their supply chains. With cost pressures mounting on drug manufacturing and geopolitical factors influencing sourcing decisions, India has emerged as a preferred destination for small-molecule drug development and production, helping to reduce global dependency on China.

India’s CRDMO sector benefits from several key advantages, including:

• 30-40% lower costs compared to Western pharmaceutical manufacturers.
• A strong track record of regulatory approvals, with Indian companies securing certifications from the United States Food and Drug Administration (USFDA) and the European Medicines Agency (EMA).
• Expertise in Active Pharmaceutical Ingredients (APIs), Highly Potent Active Pharmaceutical Ingredients (HPAPIs), and specialty chemicals, making India a pharmaceutical manufacturing hub.

Impact of the US Biosecure Act on India’s Pharma Sector

One of the biggest catalysts for India’s pharmaceutical industry is the United States Biosecure Act, which could drive further growth by reducing US reliance on China for pharmaceutical ingredients. If this legislation accelerates outsourcing trends, India's CRDMO sector could grow at a high-teens CAGR, potentially reaching ₹1,90,586 crore (US$ 22 billion) by 2030.

This shift aligns with the broader Asia-Pacific pharmaceutical CDMO market, which was valued at over ₹4,33,150 crore (US$ 50 billion) in 2023 and continues to expand due to cost advantages, outsourcing demand, and geopolitical risks.

Why India is Gaining a Competitive Advantage Over China

As global pharmaceutical companies look to diversify their supply chains, India is emerging as the strongest alternative to China due to several factors:

• Government incentives under schemes like the Production Linked Incentive (PLI) program for pharmaceuticals.
• Robust regulatory compliance, with Indian pharma manufacturers securing global certifications.
• Established API production capacity, making India a reliable supplier for critical pharmaceutical ingredients.
• Strong manufacturing infrastructure, with major pharma hubs in states like Maharashtra, Gujarat, Telangana, and Karnataka.

Expansion in Contract Research, Development, and Manufacturing

The rise of contract drug development and manufacturing in India is being driven by increasing investments from both domestic and international players. Indian pharmaceutical companies are investing in cutting-edge research, advanced manufacturing technologies, and compliance measures to strengthen their position in the global contract manufacturing space.

Some of the key areas where Indian CRDMO firms are expanding include:

• Drug discovery and formulation development, enabling pharmaceutical firms to fast-track new drug launches.
• Advanced biologics and biosimilar production, helping to meet the growing demand for next-generation therapies.
• End-to-end manufacturing solutions, from clinical trials to full-scale production, reducing time-to-market for global pharma companies.

Global Pharma Supply Chain Trends and India’s Role

The global pharmaceutical supply chain is undergoing a transformation, with companies focusing on:

• Cost optimization and risk mitigation in sourcing strategies.
• Regulatory compliance to ensure drug safety and efficacy.
• Localized production strategies to meet regional demand and supply chain resilience.

With India's strong manufacturing base, cost advantages, and growing regulatory credibility, the country is well-positioned to become a global leader in pharmaceutical outsourcing.

Future Outlook: Sustained Growth for India’s CRDMO Industry

The long-term outlook for India’s contract pharmaceutical manufacturing industry remains highly positive. With continued investment in R&D, manufacturing innovation, and regulatory compliance, India is expected to:

• Attract more global pharmaceutical partnerships as companies shift production from China.
• Expand its expertise in high-value segments like biologics, specialty chemicals, and advanced drug formulations.
• Strengthen its role in the Asia-Pacific pharmaceutical outsourcing market, gaining a larger share of global pharmaceutical contract manufacturing revenues.

Conclusion

India’s CRDMO sector is on a high-growth trajectory, with the market set to double by 2028 and potentially reach ₹1.90 lakh crore (US$ 22 billion) by 2030. The combination of cost advantages, strong regulatory track record, and shifting global supply chain strategies makes India an attractive option for pharmaceutical outsourcing. As the world looks for cost-effective, reliable, and scalable solutions, India is set to become a dominant force in the global pharmaceutical supply chain.

The Upcoming IPOs in this week and coming weeks are Nukleus Office, Shreenath Paper.

The Current active IPO are Beezaasan Explotech, Swasth Foodtech, HP Telecom India.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.

Join our Finance Saathi Telegram Channel for Regular Share Market, News & IPO Update.